07/09/2025 - Navigating the Shift: Smart Moves in Storage & Multi-Family Investing

On this Commercial Multi-Family Call, investors discussed the latest trends and challenges in the self-storage and multifamily markets, including rising interest rates, valuation gaps, and creative financing strategies. The conversation also explored deal sourcing tactics, AI integration in operations, and current mortgage market pressures impacting acquisitions and development opportunities.

The discussion focused on current trends and challenges in the self-storage and multifamily investment markets, particularly around seller expectations, financing, and deal sourcing. Rising interest rates have created valuation gaps, prompting acquisitions teams to prioritize conservative underwriting, a 1.25 debt service coverage ratio, and creative financing like private equity and seller terms. Moshe advocated for buying properties at a minimum 9% cap rate or with value-add potential, maintaining a buffer over interest rates. Scott emphasized broker relationships and an extensive database for sourcing multifamily deals, mainly in the Southeast but with openness to less competitive markets. AI integration in self-storage was explored, including platforms like Jane.ai and Swivel for marketing and collections.

Chris noted slowing transaction volume due to hesitant sellers and tightening credit, while Brandon stressed the need for investor equity amid cautious lending. Speaker 2 discussed the development pipeline, highlighting reduced facility starts as an opportunity for rental growth. Underwriting for a Buffalo project was reviewed using internal studies and feasibility data. Speaker 3 introduced AI for call center analysis and discussed syndication strategies. Market pressure from new competitors offering lower rates was also addressed. Lastly, Alex explored converting 74 units to condos to boost value but noted financing complexities, prompting discussions on presales and bank compliance.